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British Think-Tank Swings And Misses On Gender Pay Gap

Graduates of the private "International Business School Berlin" (IBS) throw their doctoral caps in the air as they pose for a family picture 31 January 2008 in front of the Brandenburg Gate in Berlin. The young men and women finished their studies in international management. AFP PHOTO DDP/MICHAEL KAPPELER GERMANY OUT (Photo credit should read MICHAEL KAPPELER/AFP/Getty Images)

The gender pay gap for millennial men and women in their 20s has shrunk in a generation, but will widen as the same group grows older, according to a study by British think-tank Resolution Foundation.

The study claims that the pay gap will widen as women enter their 30s and 40s, and begin to make the choice to have children and take time off work. While these are personal decisions made by women with their respective partners, the study says that policymakers need to do more to address the disparity during the course of women’s careers. Essentially, the government needs to mitigate the losses incurred by women over the course of their career, even if losses stem from personal choice. Resolution isn’t alone in its claims, and is not even the most aggressive perpetuator.

From the American Association of University Women to The Boston Globe to The Huffington Post, the misconceptions surrounding the gender pay gap are far reaching and well reported. Typically, the claim made is that a woman’s pay, when compared to a man doing the same job, is 79.6 cents on the dollar. Experts on the subject say that these figures are dubious, and there are tangible reasons we see small discrepancies in pay. Furthermore, there is little policymakers can do to help close the small gap that remains between the salaries of men and women doing the same job.

The study out of the Resolution Foundation “omits a lot of things that explain the gender pay gap,” Romina Boccia, a leading fiscal and economic expert at The Heritage Foundation, tells The Daily Caller News Foundation. There are many factors that help explain the pay gap, like: “how many hours women spend at the office, how much time they are taking off of work, childbirth,” among other factors, Boccia explains. “What we know from economic research, including research coming out of the Department of Labor under the Obama Administration, is that once you account for the factors that explain the wage gap, many of them have to do with preferences between men and women as to work/life balance,” Boccia tells TheDCNF.

When couples choose to have children, women are far more likely than men to take time off after the child is born. “That doesn’t mean there is something wrong with our economy, it means that it accommodates the different choices men and women make,” Boccia explains to TheDCNF. “Wages reflect productivity, and when one chooses to take time off that will be reflected in their earnings. The lesser pay reflects a gap in experience, and time put into the job.”

Mark Perry, a scholar at AEI and a professor of economics and finance at the University of Michigan’s Flint campus, thinks that the Resolution study has the premise of a gender pay gap all wrong. “One misunderstanding by the authors of this study is that they are referring to it as a gender pay gap, when it really is more accurate to call it a gender earnings gap,” Perry tells TheDCNF.

A gender pay gap implies that men and women are being paid differently for doing the same job for the same number of hours a week. The gender earnings gap takes into account a broader range of factors, like the risks incurred on the job, number of hours worked, and career choice.

Over the past decade, “it is the case that when you look at college degrees, women now earn more than 57 percent of all bachelor’s degrees and more than 58 percent of all post-graduate degrees,” Perry explains. This helps to explain why the earnings gap has decreased substantially over the past decade, as women are more educated than their male counterparts.

Later on in their respective careers, “we expect that a man will be in continuous employment throughout his entire career, whereas it’s just more the case that women take breaks in their careers.” If men could get pregnant, breastfeed, etc., “we would expect their careers to be impacted as well for family considerations. It is not a matter of discrimination, it is a matter of personal choices and family choices,” Perry explains.

Perry even does the gender pay study for the White House, and has conducted the study for President Obama for the past four years. What he’s found is that while there is always a gender pay gap of 15 to 20 percent, it is not the case that women are getting paid less than men for the same job.

“They get paid the same for the same position, as it is federal pay scales,” Perry explains. What occurs, if you look at it, “is that the men are more concentrated in the highest paid jobs. This is because there are more men than women in the labor market that have years of continuous experience. Over time, if you are looking for people with more experience, you will find more men than women.” “I’m sure President Obama isn’t discriminating against women,” Perry quips.

Boccia testified before Congress recently about this very issue, and she was asked by lawmakers the same question the Resolution study asks: What can government do about it? The policy expert says that governments could try to “to encourage men to take paternity leave to try to offset some of this imbalance,” but rectifying this small pay gap is “not something that should be mandated by government.” Rather, individuals should be left to “make their own choices to balance work and family.”

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Robert Donachie
the authorRobert Donachie
I studied Political Economy at Rhodes College in Memphis, Tn. I am an active musician and I love the outdoors. I write on economics, politics, healthcare policy (nerd things) and cronyism for the Daily Caller News Foundation.

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